In November of last year, British oil giant BP agreed to a historic $4.5 billion criminal fine in the aftermath of the 2010 Deepwater Horizon disaster that killed 11 workers and blew 5 million barrels of oil into the Gulf of Mexico.
While BP owned the Macondo well and was in charge of onsite operations, it leased the Deepwater Horizon rig and its crew from Transocean Ltd., one of the world’s largest offshore drilling contractors. And yesterday, the Justice Department announced that Transocean agreed to pay $1.4 billion to settle the investigation of its involvement in the oil spill.
From the DOJ:
Transocean Deepwater Inc. has signed a cooperation and guilty plea agreement with the government, also filed today, admitting its criminal conduct. As part of the plea agreement, Transocean Deepwater Inc. has agreed, subject to the court’s approval, to pay $400 million in criminal fines and penalties and to continue its on-going cooperation in the government’s criminal investigation.
In addition, pursuant to the terms of a proposed partial civil consent decree also lodged with the court today, Transocean Ocean Holdings LLC, Transocean Offshore Deepwater Drilling Inc., Transocean Deepwater Inc. and Triton Asset Leasing GMBH have agreed to pay an additional $1 billion to resolve federal Clean Water Act civil penalty claims for the massive, three-month-long oil spill at the Macondo Well and the Transocean drilling rig Deepwater Horizon. Under the civil settlement, the Transocean defendants also must implement court-enforceable measures to improve the operational safety and emergency response capabilities at all their drilling rigs working in waters of the United States.
“This agreement holds Transocean criminally accountable for its conduct and provides nearly a billion dollars in criminal and civil penalties for the benefit of the Gulf states.” said Attorney General Eric Holder.
The settlement concluded the Justice Department’s investigation into Transocean’s responsibility for the spill, a question that was often fraught with accusations and counter-accusations between the contractor and BP.
The hostilities began on the rig itself, as investigations revealed deep disagreements over operations in the run-up to the blow out. “This wasn’t our accident,” BP’s chief executive declared at one point, laying blame on Transocean’s systems, equipment and people. Transocean later accused BP of hoarding results and information from its own investigation into the spill. The finger pointing inspired President Obama to criticize both companies, calling the public argument a “ridiculous spectacle.”
Transocean has not faced any felony charges at the personell or corporate level, but BP has pleaded guilty to 12 felony counts including “seaman’s manslaughter” and obstruction of Congress, as well as two misdemeanor counts under the Clean Water Act and the Migratory Bird Treaty Act. Two of its site leaders have pleaded not guilty to multiple felony counts of manslaughter, and one of its executives pleaded not guilty to misleading a congressional subcommittee. The company could also face up to $20 billion in civil fines under the Clean Water Act.
As for Transocean, its stock rose 7 percent following yesterday’s settlement announcement.